Why are outside executives flocking to the cannabis industry’s C-suites?

By Andrew Ward

As the cannabis industry grows, so does the need for skilled business veterans to lead companies to the top. Demand has led to an influx of executives from other industries.

Most in the cannabis industry find that moving is a likely response to a space that is nascent. However, recent analysis has shown that gender and diversity gaps persist at the forefront of cannabis companies.

RELATED: Report: Women and Minorities Still Very Underrepresented in the Cannabis Industry

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Why hire executives from external industries?

Many cannabis companies still lack the boardroom experience needed to take a startup to a bigger stage. This skill gap has led to a demand for talent from outside the industry in recent years. The trend continues today as more and more companies go online.

Nichole McIntyre, vice president of human resources at urban-gro Inc, told Benzinga that it helps attracting leaders from industries with similar regulations as companies scale.

Luis Merchan, CEO of Flora Growth Corp, shared similar views.

“The industry is going through a period of change where operations, supply chain management, project management and financial discipline become essential to the skills of the executives who run cannabis companies,” said Merchan.

Luke Zimmerman, Esq., Lawyer and lecturer in the cannabis industry at Oaksterdam University, said that outside leadership is an appropriate choice for many companies. “If you want to be an operator in multiple states or are trying to expand into other countries, it makes sense to hire someone who has the background and experience to grow the business,” he said.

Zimmerman added that he believes the influx of outside executives is being driven by the industry’s innovative and exciting appeal.

RELATED: Here’s What Is Triggering A Spike in Cannabis Jobs

He also pointed out that changing spaces lead to changes, such as: B. a shift in tobacco consumption, declining alcohol consumption among younger populations, and an evolving pharmaceutical industry, all of which play a role.

“Executives in these industries are watching and seeing the opportunities that the cannabis industry offers,” said Zimmerman.

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McIntyre warned new executives who may underestimate the cultural shift in the emerging space, especially the casual pace.

“Cannabis companies want change and a new way of doing business, which I believe stems from continued advocacy for plants to help overcome imprecise public perceptions and misguided public policies,” said McIntyre.

Inclusion continues to lag behind when it comes to cannabis

Since the industry took shape a few years ago, some improvements have been made. However, various recent reports indicate that inclusivity in the cannabis industry, including the C-suite, could be improved.

Marijuana Business Daily’s report “Women and Minorities in the Cannabis Industry” says that racial and gender diversity is lagging across the market, as is data tracking. “Social justice initiatives and the legalization of cannabis are now intertwined, but there is still no silver bullet to improve the landscape,” wrote Jenel Stelton-Holtmeier.

Two further studies dealt with the representation of the C-Suite. Gender Parity In The C-Suite by the National Cannabis Industry Association and Arcview Group found a lack of inclusion at the top, which spread the problem across the company.

In June, a Business Insider report reported that 70% of top executives in the 14 leading companies in the industry were white men. Black people made up only 7% of top management.

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Most respondents felt that more could be done to achieve a reasonable level of inclusivity in the space.

Urban-gro’s McIntyre agrees that more variety is needed in cannabis, but said improvements are underway. “Many cannabis companies are starting to focus their efforts on diversity, equity and inclusion in their corporate culture, leaders and BODs,” she said.

“There is still work to be done in terms of diversity, partly because of the stigma in the industry,” Merchan said, adding that Flora emphasizes its inclusiveness, including a 50% diversity ratio in the C-suite.

This article originally appeared on Benzinga and was republished with permission.